Thomas            Digitally signed by Thomas Liquori                                              DN: cn=Thomas Liquori,  ...
General                                THE DEMISE OF AN AMERICAN AUTO INDUSTRY  Motors      Bankruptcy should not be an op...
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General Motors

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This short essay was for my International Business class (BUS201) back in the Winter of December 2008. It is a short analysis of the demise of the American Auto Industry. I get into briefly the effects of what would happen if General Motors would have to claim bankruptcy and go out of business.

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General Motors

  1. 1. Thomas Digitally signed by Thomas Liquori DN: cn=Thomas Liquori, email=thomasliquori@aol.com, Liquori o=thomasliquori.me, l=New York, NY Date: 2010.09.05 19:01:47 -0400 The demise of an American auto industry General Motors Thomas Liquori m e or i. qu The current myth in the media states, “The demise of the American industrywon’t really affect the American way of life. Many people wonder could this statement Lireleased by the press be fact or fiction? At any event General Motors is on the verge of sgoing bankrupt and the icon of an American giant may be coming to an end. m a The effects that would happen, if General Motors would go out of business, howould be catastrophic. In the first year alone, three million people would lose their jobs, Tfollowing another 2.5 million in the coming two years after. In the first year, personalincome would drop more than $150.7 billion in the United States, and the cost to local,state, and federal governments could reach $156.4 billion over three years in lost taxes, andunemployment and health care assistance. Domestic automobile production would more thanlikely fall to zero, even by international producers, due to supplier bankruptcies. Fromplants to parks, dealerships to driveways, gas stations to grocery stores; what happens inthe automotive industry affects each and every one of us. In fact, the collapse of theU.S based auto industry wouldnt just impact the nearly 355,000 Americans directlyemployed by the Big Three. One out of every ten people in America is employed in aservice that is related to the U.S auto industry. If a plant closes, so does its suppliers,the local stores, the hot dog vendors, and the local restaurants.
  2. 2. General THE DEMISE OF AN AMERICAN AUTO INDUSTRY Motors Bankruptcy should not be an option for General Motors, for any auto maker thatfiled for a Chapter 11 reorganization, car sales would plummet even further. A study byan Automotive Market Research Firm stated, “Eighty percent of people intending to buya new car would switch brands if the car came from a manufacturer that wentbankrupt”. I believe that the biggest answer to today’s question, should General Motorsbe bailed out by the Government, would be yes. The American auto industry is thebackbone of American manufacturing, and almost 4% of the gross domestic product isauto related. Three million U.S jobs are dependent on the health of U.S auto makers,and they are not all in the Midwest, it is across the entire country. Consumers must also ethink about what would happen to the warranties on their vehicles that would become i. mvoid, if General Motors would so happen to go under. It is in the best interest of thepeople to support the bail out of the Government to help General Motors. BERKELEY COLLEGE LIBRARY qu or G E N E R A L M O TO R S : A B I B L I O G R A P H Y Li PREPARED FOR IBS201 sWorld Wide Web Sources: m a ho <http://mfactsandfiction.com> TThomas Liquori9/5/2010 Page 2

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