Impact of the Recession on the US Auto Industry Essay

Detroit, Michigan grew up around the automobile industry. At its peak, Detroit was the fifth-largest city in the United States, becoming the home to over 1.8 million people by 1950 (Davey, Monica 2013). The prolific population was due greatly to the success of the auto industry in the city. At that time, Detroit was flying high, its name coined “The Motor City” (americaslibrary.gov), and automobiles greatly impacted commercialization. From transporting goods to hastening production, to selling parts, to manufacturing and selling new automobiles, the auto industry completely transformed Detroit. Things seemed

This was just two years after the automobile industry government bailout and automobile manufacturing accounts for more than 20 percent of the state 's economy (Bury, 2012). According to Comerica Bank 's Michigan Economic Activity Index, Michigan 's economy reached a 10-year high in 2011 and 67,000 jobs were created (Henderson, 2012).

According to the Bureau of Labor Statistics, the economic downturn beginning in December 2007 has resulted in a loss of 8.4 million jobs. In this same period, health care employment grew by 732,000.

As the unemployment rate rises, even those who have jobs begin to get a little nervous. Seeing their neighbors and co-workers losing their jobs makes the employed start to wonder, “Am I next?” Therefore, they are likely to cut back on extra spending as well. So, next year’s trip to Daytona gets cut from their budget, just in case. Ticket sales start to fall not only because the unemployment rate is rising, but also because people are feeling less secure in their finances.

The recession of 2008 is also called the ‘Great Recession’, said to have begun in December 2007, and took a turn for the worse in September 2008, and it was a severe economic problem expanded globally. This recession affected the world economy, and is said to have been the worst financial disaster since the Great Depression. The decline in the Dow Jones this time was -53.8%. Since the official start of the recession in December 2007, and through June 2010 there have been about 2.3 million homes foreclosed in the United States. In 2012, the state with the most foreclosures in January alone was California, with 51,584 houses being repossessed. Unemployment during this collapse was 8.5%, and continued to increase to about 10% as of 2010. People’s reaction to this recession was a huge decrease in spending and borrowing from banks, but an increase in saving.

In 2008 and the years after, the auto industry along with most other industries suffered greatly due to the recession. This impacted Detroit, the Motor City, greatly. Thousands of people were out of work, many companies leaving the area, and the overall moral of the city changed.

George Santayana, a Spanish poet and philosopher said, "Those who do not learn history are doomed to repeat it." This quote applies to the Great Depression of 1929 and the Great Recession of 2008. There are many similarities between the two, like the causes, the actual events, and the aftermaths. Several factors led to the Great Depression, which were the following: overproduction by business and agriculture, unequal distribution of wealth, Americans buying less, and finally, the stock market crash of 1929. The Great Recession also had similar factors leading to it, like the housing “bubble” burst and less consumer spending. In both events, the Presidents enacted programs that they believed would help the American people.

The “Great Recession of 2008" hit The United States and the rest of the world with a force not seen since the Great Depression less than a century ago. December of 2007 saw an unemployment rate of 5.7% as the economy was rolling forward on the back of the high-profiled housing market funded by aggressive loans to consumers with sub-par credit. (National Bureau of Economic Research) This created a proverbial “House of Cards” that fell apart that same month and over the course of two years; the unemployment rate would nearly double as The United States would lose over 8 million jobs according the National Bureau of Economics. The cause of The Great Recession can’t simply be quantified to just one person, agency or company. However, in the broad

The Great Recession, December 2007 through June2009 marks an unstable 18 months for the United States’ economy, that countless amounts of people won’t forget. The housing and bank markets during the recession were not recouping much money off loans and low interest rates, which cause both markets to nearly crash. This caused many Americans to lose their jobs and the unemployment rates to reach the highest numbers since the Great Depression. But ever since 2009, the economy has been an on slow but steady track up to being what it once was.

In 2009 the American auto industry was in a dire economic state. Chrysler was in Chapter 11, GM was on the brink of bankruptcy, and Ford’s future was at best uncertain. The demise of the U.S. auto industry would have a devastating impact on our national economy and specifically the economies of Michigan and Ohio.

In the latter part of 2008, the United States’ economy was rapidly plummeting - the stock market crashed, the housing bubble burst and gas prices skyrocketed. The majority of U.S. based firms faced the reality that they would not be able to survive during such desperate economic times. The U.S. automobile industry, in particular, began to buckle under the depressed economy. The government stepped in proposing a multi-billion dollar bailout to stimulate the economy and restore economic balance. The possibility of this unprecedented government intervention was condemned by many economists. If the government helped the ailing automotive industry, this industry would have to tighten their expenditures and plan for the future to prove to

Ever since the Recession of 2008, the process of acquiring employment has become extremely challenging and exhausting. After months of searching, a significant amount of job seekers are willing to accept any job offers that will allow them to put food on the tables. If you follow the United States’ economic recovery, you probably know that there are about 10.5 million unemployed Americans and constant debates about how to create more jobs. What you may not know is that there are actually four million open jobs waiting to be filled. So how is it possible and who is there to blame?

This recession hits home with the automobile industry. During this current recession GM is facing the possibility of bankruptcy, but is hoping to be helped out by the government. History

Now all the companies are having troubles. With the economy falling companies couldn’t pay their loans off. Many companies had to combine together in order to cover their loans. Companies stopped hiring people and began to lay off people. Because nobody could afford to hire anyone the unemployment rate got extremely high. Prices also rose by companies to try and make some profit off the

challenges, however, are the most difficult ones to face and overcome. Some environmental issues that