2008 Auto Bailout Cause and Effect Essay
It is argued that America invented the automotive industry when Henry Ford introduced the Model T to work lines in 1908. Since then the American auto industry has been known as the most successful in the world, with Ford, Chrysler, and General Motors leading the way in innovative technology and design. These “Big Three”, as they are called, hold ties in every civilized continent, and sell millions of cars every year. Yet at the turn of the 21st century, the fortune of these companies began to wane. Oil prices skyrocketed, and the model lineups for American cars were unable to keep up with the demand for fuel efficient vehicles. Eventually in 2008, Chrysler and GM were bailed out by the government with a 80 billion dollar loan. America was largely divided on this issue, with valid arguments on both sides. Overall conservative parties were against the bailout and liberal parties for it. Political motivations aside, the 2008 automotive bailout was necessary for hundreds of thousands of Americans to keep their jobs, and to sustain one of the U.S.'s largest industries.
Before the oil crisis began, American auto makers' primary concern were foreign imports. The Japanese had found a way to produce an affordable and reliable car while still turning a profit. On top of that, they had perfected the industrial technique of vehicle production, churning out more vehicles per day than any other country. As a result, U.S. Car makers were forced to increase their production rates. In order to do this, it was necessary for them to employ separate companies to manufacture certain parts for vehicles. For example GM would employ DGC to make X amount of windshields by a certain date to meet production deadlines. Such actions made thousands of corporations dependent on the major auto companies that employed their workforces. Often times an entire