The automotive crisis of 2008 has impacted the U.S. automotive industry in a big way. Rising fuel prices and the global financial crisis are a few causes for this downturn. The “Detroit Three” automakers – General Motors (GM), Ford, and Chrysler have been primarily affected by this crisis.
The U.S. government has helped these auto companies with a bail out amount of $17.4 billion. In addition, the government has also provided bail out money to GMAC Financial services and Chrysler Financial, which are the financial arms of GM and Chrysler.
Under the presidency of Barack Obama, most assured plans are continued to be designed for the auto industry. He shows a strong commitment towards restructuring the automotive industry and helping out the Detroit Three fall. Obama has charged a “Presidential Task Force on Auto Industry”, which is a cabinet level group to evaluate the restructuring plans of GM and Chrysler. Based on the restructuring plans submitted, the administration is expected to take a decision on providing support including extending the loans to the auto companies.
Research Analyst, Sagitha R., will discusses the background of the crisis, details of support plans and its impact on the U.S. automotive industry.