The effect of the economy (U.S)

This paper focuses discusses the effects of US economy on the Big Three companies of US automotive industry i.e. Ford, GM, Chrystler. Furthermore the paper will analyse how it effects everyone from the laid-off auto worker to the mailman, school teachers, suppliers. In the last two months, the government has loaned $25 billion to GM and Chrysler from the $700 billion EESA fund (http://online.wsj.com). The funds are being used to avoid bankruptcy, which would trigger 3 million layoffs within a year, plunging the economy further into recession. Funds are also used to stimulate spending with 0% financing (http://www.financialpost.com). Ford, on the other hand, does not need the funds, since they had already taken measures to improve cash flow. Is Ford being penalized for practicing good business? Ford is asking for government funding simply because they don't want their competitors to get an unfair advantage through government-subsidized financing. Should taxpayer dollars subsidize auto loans for one company, but not another? The ethical ramifications of this recession are just now being brought to light. The United States automotive industry is a major driving force of our economy. (Excuse the pun.) If you break it down, the products and services of companies like General Motors, Ford, and Chrysler have a direct relationship to the rise or decline of the Gross Domestic Product of our economy and therefore, much of the world's economy (http://online.wsj.com).

Manufacturer's arms spread out many different ways into the world economy bringing forth a vast network of suppliers and workers world wide to produce and sell vehicles. Just look at the different arms they have. There is; design, engineering, manufacturing, parts, distribution, transportation, marketing and advertising, service, finance and sales. Over the last one hundred years, since the invention of the automobile, oil and gas companies, tire shops, independent service and repair facilities, body shops, aftermarket companies, auto auctions, towing and trucking companies, have emerged (http://www.financialpost.com). Revenue and licensing departments have been created. Whether you like it or not, your daily life is touched by the U.S. Automotive Industry in one way or another. When you jump into that taxi, go to the hospital in that ambulance, get a tow to your garage, have your milk or pizza delivered to your front door you are coming into contact with Chrysler, Ford and GM. Also, think of all the GM, Ford and Chrysler vehicles in the federal, state and local Government fleets that are used to patrol our nations streets and serivce our utilities. Look at the badge on their vehicles (http://online.wsj.com). I do not see our police officers, FBI agents or state partol officers cruising around in a Toyota, Honda, Hyundai or Kia.

On November 19, 2008, there was a United States Senate hearing on the automotive crisis in the presence of the heads of Chrysler, Ford and General Motors. The auto manufacturers explained that they would need financial aid of $25 billion if they were to avoid bankruptcy. The Senate was divided on the ...