The Downfall of the U.S. Auto Market and the Collapse of...

The Downfall of the U.S. Auto Market and the Collapse of the Economy Unemployment is rising and the entire global economy is falling. The story has become all too common. If there is a negative direction available to follow, were definitely taking advantage of the opportunity. Americans became too accustomed to the period of inflation through the 1990s, and the ongoing recession is affecting most everyone. The Big Three automakers (GM, Ford and Chrysler) have made massive cuts to their workforces, and the entire national job market has been upended. My personal life has been greatly distorted due to these events, after Delphi (contracted by GM) outsourced most of their jobs and shut down 21 of their 29 plants in the US. In previous†¦show more content†¦In 2008 and 2009, a series of bailouts were provided to General Motors and Chrysler, due to slowing car sales and massive quarterly losses. Unions buckled due to the fact that they received much higher wages, and more luxuriou s benefits than their non-unionized counterparts. In 2006, Consumer Reports top ten car picks were Japanese (Noe). Parts makers were quick to move jobs overseas, where laborers were willing to work for much less money. In 2008, GM closed 14 factories, 2,000 dealers, and cut 47,000 employees. All of these factors, among numerous more, were responsible for the collapse of the economy on a national and global scale. Gasoline prices soared during the energy crisis which lasted from 2003-2008. Consumers moved from buying SUVs and trucks to more fuel-efficient cars, such as hybrids. This was especially disconcerting considering that these larger vehicles were the most profitable for the automakers (MSNBC). The market which was hardest hit was that of the parts-makers, which saw their cash flow cut in half, since automakers were rushing to cut production (Economist). GM filed for bankruptcy 32 days after Chrysler, effectively making GM the fourth-largest company ever to file for bankruptcy (Carty). According to Darwin Bible, probably one of the worst things about it has been watching all the stress on workers faces and their families faces (Carty). Overall mental health is rapidlyShow MoreRelatedThe Government Bailout Saved the Automobile Industry Essays2506 Words   |  11 Pageslatter 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. 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