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Research Paper

The Effects of the Great Recession on the Auto Industry

Submitted by

Luis A. Castro

Prepared for

Professor John Machnic
BUSN 6120, Managerial Economics
Summer 1, 2012
Section: OE
Webster University

July 24, 2012

CERTIFICATE OF AUTHORSHIP: I, Luis A. Castro, certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

____________ 07/24/2012 Signature Date Introduction
The automotive industry in the United States is a key factor in economic growth because of the significant impacts on all major industries and cultures. Automotive industry is one of the largest industries in the United States. Historically, it has helped 3 to 3.5 percent of gross domestic product (GDP). It directly employs more than 1.7 million people who are involved in the design, manufacture and distribution of parts, components to install, sell and service the components. The industry of auto uses $16 to $18 billion annually for the research and development of the products. By excluding the automotive sector, it is difficult to determine the effects of global recession with in United States (Gereffi, 2005).
Recently, if the analysis is done it can be clearly seen that the automotive industry has fallen on hard times. However, the U.S. continues to be one of the largest car industries in the world and many companies are selling and manufacturing in the United States. During the recession period, many suppliers and dealers along with many manufacturers have been struggling to survive and became lender of last resort.

Discussion
The effects and drawbacks of the recession in the United States since 2007 are easily recognized by the

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