Extended Essay

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.

General Motors is faced with a dilemma. In the face of economic depression, competition from foreign players was driving down profits and the market’s preference was changing to efficient cars due to

News reporters, public speakers, and other people use rhetorical strategies for writing and speaking. The rhetorical strategies that could work on me are adapting to my style and use formal authoritative quotes. The way I would influence someone to my way of thinking is by utilizing mainly formal authoritative quotes, and adapting to that person’s style.

Ford’s F-Series experienced a 46% drop in sales for 2006 compared to 2007, making a once most wanted truck in the United States almost abandoned by the consumers. The second and the current recession that began in 2007 brought a new wave of impact on the auto industry. At the time banks were more flexible with approving loans and the interest rates were low which attracted a lot of consumers into the housing market. Since many of them were not able to afford it, eventually they turned to foreclosure leaving them with debt and no credit worthiness; thus, banks started raising the interest rates on auto loans. But foreign competition, higher oil prices, and higher interest rates were not enough to destabilize the auto industry on such a scale; it was the recession that shocked it the most.

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

The American automotive industry has led the American economy for many years. This industry has shaped our development, and influenced American culture and social mores. Now, ensnared by globalization and other dominant factors, it faces a difficult reality. The American automotive industry significantly impacted the lives of Americans. Detroit’s “Big Three” had the most significant roles in this. Chrysler, Ford, and General Motors were American symbols. They are credited for a significant percentage of all American jobs; they put numerous blue-collar families into the middle class, and helped America cultivate into the giant of the twentieth century. Unfortunately, the fabled automotive firms are not what they once were and are traveling

us that are old, enough to remember how the Big 3 automakers almost collapsed back in the late 70's, early 80's, the world was made aware of the troubles in these plants. The autoworkers seemed to be sucking the companies dry with their extravagant labor agreements, while their levity, quality and design of their product was lackluster. The oil embargo that OPEC orchestrated also revealed a problem with U.S. automakers, they were unwilling to adapt to the changing environment around them. Meanwhile the Japanese automakers were busy making fuel-efficient, smaller, less expensive vehicles; the Big 3 resisted this change with their very fiber. They continued to crank out their muscle cars, and their gas-guzzlers. Consumers lost confidence in the U.S. automobile and quickly switched to the cheaper more fuel-efficient Japanese models.

This ended its $80 billion bailout with the U.S auto industry. With the stock market being at an all-time high, the Treasury made a 2.4 billion profit on its initial 17.2 billion investment. The Obama administration also required Chrysler to merge with Fiat through a combination of stock sales, partial loan repayments, dividends and interest payments. President Obama did not want the Big Three to look at the government as just a loan office, he wanted a return to profitability to be one of many objectives which called for him to put some regulations into place. His idea was that “if we’re going to help you, then you have also got to change your ways”

General Motors Company has played a pivotal role in the global auto industry for more than 100 years. However in 2008, it was almost brought to its knees by a major recession and global credit crisis that drove car sales to near depression levels and dried up private sources of capital. This paper attempts to review what happened to General Motors while analyzing the macroeconomics of its corporate operations.

The biggest economic factor that affected the automobile industry is the global recession of 2008-2009. During this timeframe, many homeowners purchased homes they could not afford thinking that house prices would raise and in reality the prices fell, which led to foreclosures across the nation. Thus, many banks lost money due to financing home loans, which further caused several banks to be bailed out by the government. Once the home market crashed, Americans stopped spending money on luxury items such as cars and focused more on necessity purchases.

In recent years, the global recession has made a huge impact on the company cash flows and its financial situation. To sustain as a global leader in the highly competitive automobile industry the GM needs to have its own strategic plan to produce the next generation of vehicles and it has got no time to delay. This is a crucial time for automobile industry with many threats, but opportunities as well. The company has to choose the best "opportunities" to overcome the "threats" and "weaknesses" using its "strengths". The next several years will redefine

Concerns about energy were not high on the list of American priorities, but that situation was about to change dramatically. As a result of the OPEC oil embargo the price of oil has risen from 3 dollars per barrel to nearly 12 dollars per barrel globally. US prices were significantly higher. The domestic oil industry could not make up the shortfall in supply caused by the embargo this led to rationing and long lineups at gas stations some up to four miles’ long. The average domestic price of gas climbed to 83 cents per gallon from 38 cents per gallon. Sales of smaller, more fuel efficient cars sky rocketed. At the same time declining demand for the big, heavy gas-guzzlers that most American car companies were producing spelled disaster for the domestic auto industry . During this period U.S. GDP fell 3.2 percent the ensuing recession marked the end of the general post World War II economic boom. This recession differed from previous recessions in that it began with stagflation, where high unemployment coincides with high

Overall, the Canadian government’s bailout of these automobile manufacturers was a mistake. Not only is it illogical to financially reward a company that reacted poorly to economic uncertainty, it also creates an immense moral hazard. Since the rescue package has done very little to protect Canadian jobs and goes against public and expert opinions, it only seems to be benefitting the executives that created a need for the bailout in the first place. As a result, automobile manufacturers as well as other corporations will begin to believe that no matter how many bad

The international automakers invested more than $72 billion to capitalize 425 facilities and offices. This created jobs for 123 thousand Americans with $9.3 billion and products purchased from US suppliers for $104 billion to produce 5.3 million vehicles in which 46% of all US vehicle production. There are nearly 10 thousand dealership franchises sold that employ more than 500 thousand American gaining $29 billion. Further, nearly 900 thousand US-built vehicles were exported. These figures clearly shows that there has been a domino effect of success in the US auto industry and it means that it is a great contributor to the US economy.

The characteristics of the global motor vehicle industry are a boom in certain places and a bust in others all due to economic conditions in different nations. Four years after tow of Detroit Michigan’s big three went into bankruptcy American car makers are going “full throttle” with sales in August hitting an annual rate that if substantiated can take them back over 16 million and that is a rate that was last hit before the economic crisis and 80% higher than 2009 when GM and Chrysler went into bankruptcy. The opposite is happening in Europe being in its sixth year slump now and with a weak economy, high petroleum prices and an aging