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Current Event Car Crisis

The credit crisis has significantly diminished consumer confidence, leading to a sharp decline in car purchases, with Americans buying 37% fewer cars in November compared to the previous year. Car dealerships face financing challenges, and last year's rising gas prices have compounded the issue. In 2008 alone, over 800,000 jobs linked to the automotive sector were lost, marking a 40% increase in unemployment. The Big Three automakers are struggling, with GM and Chrysler seeking billions in loans to restructure amidst layoffs and factory shutdowns.

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Current Event Car Crisis

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  1. Current EventCar Crisis

  2. Causes • Credit crisis has had a negative impact on consumers’ confidence and their purchase behavior (Americans bought 37% fewer cars in November than they did a year earlier • Car dealerships are unable to access financing to purchase cars from the manufacturers • Last year’s rise in gas prices Josh Lanouette and Justin Gauvin

  3. Over 800,00 people lost car-related jobs in 2008, which accounts for 40% of the increase in unemployment •  A 50% reduction in the Big Three's domestic operations would result in 2.5 million people losing their jobs

  4. GM in 2009-Selling or Closing Hummer, Saturn and Sabb-Already received $13.4 billion in U.S. loans-Asking for $16.6 billion more -$7.7 billion in loans from the Department of Energy to develop fuel-efficient technology.

  5. GM in 2009 -Shut Down 5 more factories -Eliminate thousands of dealerships and 47,000 jobs around the world -Turn $29 billion in company debt by swapping debt for stock. -Stock today February 18, 2009 at 2.10 opposite to a year ago at 24.50

  6. Chrysler Filed for Chapter 11 Bankruptcy, foresees $25 billion in restructuring costs Lost $8 Billion in 2008 Chrysler has received $4 billion in loans and said it needs $5 billion more. Filed for Chapter 11 Bankruptcy

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