An Industry in Crisis: The Importance of a Strong Automotive Industry
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Authors
Maly, James S.
Issue Date
2009
Type
Thesis
Language
en_US
Keywords
Alternative Title
Abstract
The automotive industry has been a staple of the U.S. economy since the
invention of the automobile over 100 years ago. With the financial crisis that has
occurred over the last year consumer confidence has been very low and quite
volatile affecting all consumer-based industries. With the crisis the auto industry has
been hit hard due to people having less money to buy new cars resulting in huge
drops in production and the loss of hundreds of thousands of jobs in the auto
business alone. A highly controversial decision to bailout financial institutions as
well as provide government incentives to the people of the United States included
support for the Big Three auto companies, Ford, GM, and Chrysler. GM and
Chrysler received a much-needed influx of cash in order to keep their operations
going and both subsequently filed for bankruptcy protection. In July and August of
2009 the Car Allowance Rebate System, gave consumers a cash incentive to turn in
old cars in return for new models, which resulted in stimulus in sales· as well as the
positive effect of these new cars getting much better mileage and producing less
carbon emissions in comparisons to those taken off the street.
With the auto industry supplying jobs to .so many Americans, there is little doubt
as to the importance of keeping them running strong. The debate is over whether it
is the government's responsibility to create ways for this to 'occur and fight against
the free market society that American capitalism is based on. It is the people who
are responsible for paying the price of the government intervention that occurs,
somewhere in the future when the debts that are incurred must be repaid. The
question .that arises, is whether or not the government is making the right decisions
for the future of America, by making decisions now that future generations will have
to pay for. There is little doubt that the automotive business is a key part to a
confident and strong economy and it is the fact that so many stand to gain so much
by the survival of these companies that justifies the decision to· end them support.
The jobs that are created by this industry and the wealth that it creates for America
is important for there to be a strong and lasting economy down the road as the
country moves forward into the future.
Description
27 p.
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U.S. copyright laws protect this material. Commercial use or distribution of this material is not permitted without prior written permission of the copyright holder.