Historical Growth Of The U.s. Domestic Automotive Industry Since 1980

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Historical Growth of the U.S. domestic automotive industry since 1980 Dalia Lopez Econ1A James M. Ford, Ph.D. September 20, 2014 The focus of this paper to describe how the automotive industry has evolved throughout these past years, and its impact on the U.S. economy. The domestic market has gone from being dominated by the “Big Three” which are General Motors, Chrysler, and Ford to now including other major manufacturers from foreign countries. The industry has become an important economic indicator used to predict fluctuations in the U.S. economy. It currently makes up approximately 3.5 percent of the U.S. GDP. The Foreign manufacturers however are slowly increasing market shares now that the Big Three aren’t so big…show more content…
In the 1990s the auto industry made up 2.5 % of the GNP and employed about 850,000 people. At the time that was about 4.5-5 % of all manufacturing workers (wong, 1990). Then during the early 2000s labor productivity was increasing greatly, but the American auto-makers failed to produce energy-efficient cars for the energy crisis. When the recent recession hit the U.S. automakers had a major setback causing a cut in employment, production, and huge loss in revenue. After the government bailout the industry improved, by 2012 sales, exports, and employment rose to a new high. It’s now 2014 and we are still getting out of the recession but due to government decisions, deals made between companies, and increase in jobs, sales have increased dramatically. According to (Economic Contributions) “building 60 million vehicles requires 9 million people directly in making the vehicles and the parts that go into them.”That’s 9 million people without including the ones who work indirectly like in steel, rubber, and other manufacturing jobs. Between and 2007 and 2009 when the recession hit there was a 7.4% decrease per year in labor productivity. The Big Three suffered a loss of 17% in the market share between 2001 and 2008. Both Chrysler and GM were obliged to file for chapter 11 bankruptcy and both received aid from the Automotive Industry Finance Program, which was created from TARP funds. The controversial bailout saved 1.5 million U.S. jobs and about
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